Krispy Kreme Doughnuts is to enter into a supply chain distribution agreement with Sysco Corporation, according to an announcement made today.
The agreement proposes that Sygma, a Sysco subsidiary, will distribute proprietary doughnut mixes, other ingredients and supplies to Krispy Kreme franchise and company shops in the eastern United States.
Another Sysco subsidiary, IFG, will handle distribution of Krispy Kreme goods for export to the 20 foreign countries in which the company's international franchisees operate.
The proposed agreement is not expected to have a material effect on the company's consolidated revenues or balance sheet, but it will mean that all of Krispy Kreme’s domestic and international distribution operations will now be outsourced.
Krispy Kreme outsourced distribution to shops in the western United States in 2008. The anticipated transition to Sysco in the eastern US and internationally is expected to take place in the second and third quarters of 2011.
"Partnering with Sysco, a world-class logistics company with expertise in the restaurant industry, allows us to benefit from their buying power and the size and reach of their distribution network," said Brad Wall, senior vice president of supply chain and off-premises operations for Krispy Kreme. "By completing the outsourcing of delivery of doughnut mixes, ingredients and supplies, we expect to further simplify our supply chain operations and add capabilities and services for our franchisees."
Krispy Kreme produces its proprietary doughnut mixes and concentrates at its mix manufacturing facility in Winston-Salem, North Carolina. They are undoubtedly the best doughnuts this writer has tasted!
